Did you know that, if you’re lucky enough to be in the position, you can at present take your personal pension benefits from age 50?

Increasing to 55 from 6th April 2010

The rules are changing though – from 6th April 2010 the minimum age for taking personal pension benefits is increasing to age 55. The change in the pension rules could mean those people who are now aged 50-54 and wanting to take their pension benefits early being forced to take pension benefits from age 55 – thereby having to defer retirement for up to 5 years.

So, it pays to plan ahead!

Does this just affect people who want to take an annuity from their personal pension plan?

No – it also affects anyone who wants to move into “income drawdown” before age 55 as well as anyone receiving pension benefits in the form of “phased retirement” – this is whereby you take a percentage of your pension plan each year and is designed, through a combination of tax-free cash and annuity income, to provide you with a level of pension income which allows your remaining pension plans to remain invested and benefitting from tax-efficient growth.

Any unvested (i.e. pension funds which you have not taken pension benefits from) will have to remain so until age 55.

If you’re currently aged under 55 you seriously need to speak to your pension/financial adviser as soon as possible.

Action

• If you’re in ”phased retirement” through your personal pension and are currently under 55 then urgently speak to your financial adviser about what actions you need to take as your income could be cut short from 6th April 2010.
• If you’re aged 50-54 now and plan on retiring in the next few years you should consider taking benefits now to ensure you don’t fall foul of these changes in personal pension minimum retirement ages.

Naturally, before taking any actions with regard to your personal pensions or any other investments you should seek advice from a suitably qualified professional adviser.

And finally……

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